While I am still relatively bullish on the 2012 tech market outlook for the US (see our April 2, 2012, "US Tech Market Outlook For 2012 To 2013" report), I have to say that the data we got on the US economy and on the US tech market was a bit softer than I expected. US real GDP growth came in at 2.2%, a bit lower than my expectation of 2.5%. On the positive side, consumer spending rose by 2.9% in real terms, and residential construction continued to improve. On the negative side, business investment in structures was weak, and government spending fell at both the federal and state and local levels. More to the point, business investment in computer equipment and communications equipment fell from Q4 2011 levels, though computer equipment investment still was almost 8% higher than levels a year ago. Software investment, though, was up strongly — by 8.2% at an annualized rate from Q4 2011 and by 8.4% from Q1 2011.
In the last couple of weeks, I finally put a couple of pieces together . . . the tech industry is pushing hard, down two parallel tracks, toward much more resource-efficient computing architectures.
Track 1: Integrated systems. Computer suppliers are putting hardware components (including compute, network, and storage) together with middleware and application software in pre-integrated packages. The manufacturers will do assembly and testing of these systems in their factories, rather than on the customer's site. And they will tailor the system — to a greater or lesser degree, depending on the system — to the characteristics of the workload(s) it will be running.
The idea is to use general-purpose components (microprocessors, memory, network buses, and the like) to create special-purpose systems on a mass-customization basis. This trend has been evident for a while in the Oracle Exadata and Cisco UCS systems; IBM's Pure systems introductions push it even further into pre-configured applications and systems management.
Track 2. Modular data centers. Now, zoom out from individual computing systems to aggregations of those systems into data centers. And again, assemble as much of the componentry as possible in the factory rather than on-site. Vendors like Schneider, Emerson, and the systems shops like IBM and HP are creating a design approach and infrastructure systems that will allow data centers to be designed in modular fashion, with much of the equipment like air handling and power trucked to the customer's site, set up in the parking lot, and quickly turned on.
A week from tomorrow, I will be presenting a keynote on Smart Computing at Forrester's EA Forum in Las Vegas and later the same day a presentation on US IT spending with my colleague Chris Mines to Forrester's CIO Forum. The common theme in both presentations is that new technologies like Smart Computing, cloud computing, and mobility will drive companies to increase their tech spending and investment in 2012 and 2013.
The Smart Computing keynote presentation will draw on research from my report on "Smart Computing Connects CIOs With The Business," in which I discuss the ways in which sensors, RFID, M2M, advanced analytics, mobile devices, and collaboration platforms and applications are allowing CIOs to address previously unaddressed business problems, using various combinations of these technologies that will vary by industry. I will focus on specific industry examples in trucking, healthcare, and health insurance.
The US Tech Market Outlook presentation will include Smart Computing along with cloud computing, mobility, and IT consumerization as technologies that will cause US tech budgets to rise by over 7% in both 2012 and 2013 — well above the 4% to 5% growth in nominal GDP that we expect. Most of the numbers we will share will be those from our most recent US tech market report: "US Tech Market Outlook For 2012 To 2013 -- Improving Economic Prospects Create Upside Potential." However, Chris and I will also provide the very latest tech market data from government and vendor reports.
Today Google announced Google Drive as a solution to store, share and synchronize content across multiple devices. Big deal? Yes, this could be a very big deal. Why? Here's the deal: Up until now Google has addressed the enterprise by attempting to displace two of the most deeply entrenched applications, email and productivity. Let's face it, email is big, messy and expensive to move. Not to mention risky. Doesn't mean organizations don't do it, they just will do it on their own time and terms. And that's just email. Want to take Microsoft Office away from me? Pry it out of my cold dead hands. I'm happy to use Google Apps for certain stuff, but I need my Office. So basically, until Drive, Google was attempting to move some pretty tough stuff. Their addressable market was small firms (some of whom have and will grow large) and really forward-thinking organizations that were willing to make a pretty dramatic change. Large, risk-averse enterprises? Not so much.
Then came Google Drive. Content storage is in the midst of a massive upheaval. Three indicators:
Users are becoming increasingly dependent on Dropbox for file synchronization, and IT is not always happy about it. Geez, I just want to have a file I start on my laptop at work available to peek at on my smartphone on the train home. Oh yeah, I also want it on my tablet while I'm at home watching Suburgatory. And, I may want to point a colleague to it. Sounds reasonable. IT, you don't want me to use Dropbox. Watcha got instead?
Vodafone agreed to acquire Cable & Wireless Worldwide (CWW) for 1.04 billion pounds in cash, valuing CWW at three times EBITDA. The deal propels Vodafone to the second largest telco in the UK with revenues of GBP6.97 billion, behind BT with revenues of GBP15.6 billion. From a financial perspective, the deal has a limited impact, accounting for only 3% of Vodafone’s 2011 EBITDA. However, given BT’s lack of a mobile division, Vodafone, becomes the leading integrated telco in the UK, offering fixed and mobile operations. The deal is expected to complete in Q3 2012.
The main focus of the deal is on CWW’s UK fixed-line network and CWW’s business customer base, both of which Vodafone aims to add to its UK mobile network. CWW provides managed voice, data, hosting, and IP-based services and applications. The deal boosts Vodafone’s enterprise offering, both in terms of access and transport infrastructure and also in terms of customer base. CWW is a major global infrastructure player: Its international cable network spans 425,000 km in length, covering 150 countries. In the UK, CWW operates a 20,500 km fiber network. Moreover, CWW has about 6,000 business customers. The future of CWW’s non-UK assets remains uncertain. In our view they do provide true value for Vodafone, strengthening its global network infrastructure. Vodafone will provide further details regarding these non-UK assets later in the year.
Tablets aren’t the most powerful computing gadgets. But they are the most convenient.
They’re bigger than the tiny screen of a smartphone, even the big ones sporting nearly 5-inch screens.
They have longer battery life and always-on capabilities better than any PC — and will continue to be better at that than any ultrathin/book/Air laptop. That makes them very handy for carrying around and using frequently, casually, and intermittently even where there isn’t a flat surface or a chair on which to use a laptop.
And tablets are very good for information consumption, an activity that many of us do a lot of. Content creation apps are appearing on tablets. They’ll get a lot better as developers get used to building for touch-first interfaces, taking advantage of voice input, and adding motion gestures.
They’re even better for sharing and working in groups. There’s no barrier of a vertical screen, no distracting keyboard clatter, and it just feels natural to pass over a tablet, like a piece of paper, compared to spinning around a laptop.
If you wanted to see the full spectrum of cloud choices that are coming to market today you only have to look at these two efforts as they are starting to evolve. They represent the extremes. And ironically both held analyst events this week.
OpenStack is clearly an effort by a vendor (Rackspace) to launch a community to help advance technology and drive innovation around a framework that multiple vendors can use to bring myriad cloud services to market and deliver differentiated values. Whereas Oracle, who gave analysts a brief look inside its public cloud efforts this week, is taking a completely closed and self-built approach that looks to fulfill all cloud values from top to bottom.
Reporting Manager. Computer Systems Manager. MIS Director. IT Manager. Chief Technology Officer. Director Of IT. Chief Information Officer.
It's not just a change of job title. It's the recognition of the change of an era.
While the current term "CIO" engenders a spirit of managing information assets (not technology) the reality for many is that the CIO role is still just as much about operations, platforms, products, vendors and contracts as it is about developing the strategic value of information within the organization. But while we are distracted by the day-to-day running of our businesses, we forget that the world truly is changing. The old adage that we "overestimate what can be achieved in a year and underestimate what can be achieved in five" has never been more true.
CIOs are the new face of a new generation. We don't have a cool new name for you yet -- but it's coming. Whatever you will be called, it is what you do that will ultimately define you.
With these changes comes a completely new set of skills and capabilities for all of "IT" (I'm sure in 20 years' time even that will be called something different). The journey has already started. The ground has been moving beneath your feet for some time now. It's time to stop trying to "gain a seat at the table" and start organizing the party.
Here's just a couple of things we're seeing that are forcing CIOs roles to change and what to do about it -- now.
I’m at IQPC's Financial Services conference in New York listening to Brenton Harder, MD and head of operational excellence at Credit Suisse. He's clearly got a lot of experience under his belt that is worth sharing. Here are some BPM lessons learned based on his experience working in multiple businesses:
Businesses must move from static BPM to a dynamic community with a clear customer focus. He believes BPM practitioners need to own the customer experience and even become chief customer officers. He also thinks “outside in” BPM hasn’t been customer-centric enough. Focusing on the customer requires more than thinking about inputs and outputs to a process; instead, it involves really digging in and understanding the end-to-end business process from the customer’s vantage.
Continuous improvement, or Kaizen, is fundamentally sound, but sometimes you must go faster than that. For example, in financial services, regulatory requirements are moving faster than ever, and customer expectations are increasing at a faster pace, requiring process experts to move faster than most continuous improvement methodologies and tools support.
IQPC’s Process Excellence for Financial Services conference just got to one of my favorite topics — change management. The more I work in process transformation, the more I realize that change management is absolutely crucial for determining success or failure. Also, driving innovation and sustaining a culture of innovation is closely linked to how well the organization does change management.
The panelists include:
Karl Friedman, coaching/training lead, Allstate Insurance Co.
Larry Duckworth, COO, The Quality Group.
Christopher Gaver, vice president, service excellence, Prudential.